As an expat living and working in the UAE, your income will not be enough to cover all your expenses, especially when it comes to medical and hospital bills. You need something solid to rely on so that in case something bad happens to you while you are in the country, you will not be stressed out of the possible expenses in the future. While health insurance is mandatory in Dubai and Abu Dhabi, it is still important to have a life insurance available for added protection.
One good thing about living here is that you can get your life insurance easily with the help of accredited UAE insurance companies. Continue reading the rest of this article to learn more.
Why do you need life insurance in the UAE?
Basically, life insurance can cover your expenses when something unexpected happens to you due to accidents or critical illness. Your life here as an expat is not always guaranteed to be on the best spot. While you are enjoying your time here as a resident and as an employee, it’s best to think about compelling subjects. Life insurance can take care of the expenses when the policyholder dies or becomes critically ill. Life insurance can take care of your spouse and children financially when this time comes.
Half of expat population in the UAE doesn’t have life insurance
GulfNews revealed that almost 50% of expats in the UAE don’t have life insurance yet because of certain reasons like they can’t afford the premium or they don’t know anything about life insurance. This is where the importance of knowing life insurance comes in. As mentioned above, life insurance can cover your financial expenses in case something bad happens to you while you are in the country. It can also give your family financial assistance if you die unexpectedly.
Another concept that you should understand is the critical illness plan, which is a part of your health insurance most of the time. Since health insurance is now mandatory, you don’t have to worry about this too much. Your employer or sponsor is responsible to get your health insurance that can cover chronic diseases and medical procedures.
What are the types of life insurance that you can get in the UAE?
Basically, there are three types of life insurance that you can choose from if you want to get it here in the UAE. Here are they:
1. Term Life Insurance
This life insurance is the simplest. With this policy, you will only have to pay for the premium during a fixed period. You will have the chance to choose the period you want to cover and once that period is over, your policy ends and so as the premium payment. This plan has no savings component and the policy only runs within the fixed term you chose. What makes this ideal for expats is that the price is considerably more affordable than other types of life insurance. However, this life insurance is only applicable for a limited period.
2. Whole Life Insurance
Unlike the term life insurance, this type covers your entire life as long as you can complete the premium payments. The whole life insurance is more flexible and provides more benefits as this comes with death benefit and accumulated cash value that can grow annually. What makes this a good choice for expats in the UAE is that there is an option for you to borrow money against it during emergency situations. But of course, you have to pay for higher premium charges.
3. Endowment Plans
Endowment plans can be both life insurance and investment. It runs on a fixed-term as well but unlike term life insurance, you can get your money at the end of the fixed period you set. This policy gives payout during death and survival, which is good for those who don’t want to spend their money on term life insurance. Endowment plans in the UAE can be unit-linked insurance plans (ULIP) and money-back policies.
How to buy life insurance in the UAE?
For expats who are interested to get their own life insurance and pay premiums, here are the steps you have to take:
1. Look for an insurance provider.
Since you are not a local of the UAE, you might think that it will be challenging to look for an insurance provider. You are right but there are insurance companies now that are accepting expats as their policyholders. Some of the best providers you will find in the market are Union Insurance, Noor Takaful, Alliance Insurance, and Salama. Try to visit their company or talk to one of their agents so would know the pricing of their plans. Don’t forget to ask the complete details of the policy when talking to an agent.
2. Make sure to compare the plans and coverage of the providers you found.
The insurance providers mentioned above can already provide you with a list of good options. Compare their plans, premiums, and coverage when you are choosing the right insurance provider. They surely have different policies and it’s best to choose the coverage you prefer.
3. Decide how much you are willing to spend on a premium.
Let us not forget the amount you are willing to spend on a premium. As an expat working in the UAE, your income is essential. You should only get your life insurance if it fits your budget. Remember that the premiums can be high or low depending on the coverage you want. Assess your financial capability first before you decide to sign an insurance agreement.
Final Thoughts
The best life insurance depends on your preferred coverage. But, if you are really looking for long-term benefits until you retire, you should go for the whole life insurance plan. This will help you and your family financially. And with life insurance, you know that your hardship as an expat in the UAE is all worth it at the end. Consider life insurance as an investment and assess whether your income can cover a premium or not.